System Capacity vs Energy Production

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    As the United States is shifting from a carbon-based energy infrastructure to a renewable energy infrastructure it’s important to know how these systems work and how to size them. In this article we’ll talk about some basic terminology for solar and battery systems and understand the difference between a kilowatt (kW) and a kilowatt-hour (kWh).

    System Capacity

    System capacity is the potential power of a system under ideal conditions. The power of a solar panel is rated in watts, and a single panel produces 400 watts (W) of power. To put it in horsepower measurements, 746 W = 1 horsepower. Meaning that 400 W is more than ½ a horsepower.

    Let’s adjust this for a residential application. If you had (20) 400 W panels on your house that would provide a total system capacity of 8,000 watts, or 8 kilowatts (kW). The power potential of this solar system is over 10 horsepower!

    Energy Production and Consumption (kWh)

    Power over time equals energy, measured in kilowatt-hours. Your energy bill is measured in kilowatt-hours (kWh) or how many watts you use over a certain amount of time.

    A perfect example of this is a 60 W light bulb. If it’s running for one hour it will consume 60 watt-hours. If you have one hundred 60 W light bulbs running for one hour, that’s 6,000 watt-hours or 6-kilowatt hours (kWh).

    Solar System Production

    An 8 kW solar system sitting in direct sunlight for ten hours a day could theoretically produce 80 kWh. However, there are real life conditions which reduce this number.

    For example, when the sun is rising in the morning, it would be hitting south facing solar panels at a low angle which is not ideal for producing electricity. In fact, panels facing east will produce more electricity in the morning than panels facing south.

    Conversely, panels facing west will produce more electricity late in the day than panels facing south. However, southern facing panels (in the northern hemisphere) will overall produce about 10-15% more power than those facing east or west.

    Other factors, such as the duration the sun is in the sky, make a huge difference when calculating system production. The winter and summer solstices are major factors in determining system production.

    During the winter solstice, the sun is low and will only spend nine hours in the sky from sunrise to sunset in Portland. Whereas during the summer solstice, the sun is high in the sky, directly over your solar panels for almost sixteen hours from sunrise to sunset.

    Solar systems during Portland’s long summer days will produce more power than systems during summers in California, Texas, or Arizona. Calculating the total solar system production also requires that we take into consideration system inefficiencies.

    System Inefficiencies

    System Inefficiencies
    Labs get amazing results when they test solar technology, but in the real world, internal and external factors reduce the power potential of 400 W solar panels and 8 kW solar systems.

    Solar systems lose energy internally through their components:

    • Solar panels produce DC power, but homes use AC power. When inverters, the most important components in solar energy, convert DC power to AC power, power is naturally lost.
    • The wires that connect the panel and the inverter are not 100 percent efficient.
    • The longer the wires that are used for the system, the more resistance or voltage drop a system will have.

    Externally a system can’t meet its rated capacity due to environmental conditions such as:

    • Ambient temperature
    • Shading
    • Dust
    • The angle of the sun
    • The tilt and orientation of the panels

    By taking all of these factors into consideration, we can get a more exact calculation as to how much energy a solar system will produce in a year. Calculating inefficiencies is the most important factor when comparing solar systems.

    For example, an 8 kW solar system with an inefficient central inverter and panels mounted on the north side will produce much less energy than an 8 kW system with microinverters facing south on an unshaded roof.
    Here’s a sample system with its associated losses and a performance ratio of 0.889 (A system with zero inefficiencies, and perfect lab results, would have a performance ratio of 1):

    total solar panel system loss

    Sizing a Solar System

    When sizing a solar system, we want to know what the demand (or annual consumption) is for your home. Once we know the demand, we can factor in the inefficiencies mentioned above and size the system accordingly.

    Let’s say that your home consumes 12,000 kWh per year. Our goal would be to make the system produce the energy to cover 100% of that usage. If you have a large south facing roof, it’s likely that a 10 kW system could produce about 12,000 kWh per year. However, if your roof is oriented east to west and has partial shading due to some surrounding trees, it might take a 12 kW system to produce that same 12,000 kWh for the year.

    In Portland, the average 12 kW system generates around 12,000 kWh per year. See the chart below for exact numbers:

    Jan - 244 kWh Apr - 1,294 kWh July - 1,947 kWh Oct - 548 kWh
    Feb - 385 kWh May - 1,553 kWh Aug - 1,812 kWh Nov - 249 kWh
    Mar - 814 kWh June - 1,819 kWh Sept - 1,502 kWh Dec - 202 kWh
    Total = 12,456 kWh

    Battery Storage Sizing

    When sizing battery storage, we consider the same characteristics as a solar system—power (kW) and energy (kWh)—, but in a different way. The power coming from a battery system is measured in kW and the capacity is measured in kWh. A battery system’s efficiency is determined by what types of loads and the size of the loads you want to run in your house.

    Let’s use the Tesla Powerwall 2 as an example:

    A Powerwall has a 5 kW power output and runs on 240 V systems. This means that it has enough power to run lights, outlets, and small appliances like a refrigerator or microwave.  Adding multiple batteries together can double or triple the power output allowing the battery bank to run large loads like AC units, pumps, ovens, etc.


    Energy is measured in kWh. In battery speak, kWh is the capacity of a battery. The Tesla Powerwall 2 has a capacity of 13.5 kWh. That means, if you were to max it out at 5 kW, it could run about two and a half hours (13.5 kWh divided by 5 kW = 2.7 hours).  Similarly, if you only had a 1 kW load it could run for 13.5 hours or a 500W load for 27 hours.

    Furthermore, the Tesla Powerwall 2 has a peak power output of 7 kW which it can sustain for 10 seconds. After that it drops down to its continuous max output of 5 kW. This peak output is useful in residential applications because some loads, such as air conditioners, have a higher power demand during startup, and a lower operating demand once running.

    Adding more batteries to a system adds power and capacity (energy). With (2) Tesla Powerwall 2s you double everything with twice the capacity (27 kWh) and twice the power (10 kW). 

    As a rule of thumb, (1) Tesla Powerwall 2 can only run loads on 30-amp breakers and below. That’s typically lights, outlets, and possibly a refrigerator. Adding a second Tesla Powerwall would allow you to run one large load up to 60 amps, such as a clothing dryer, AC, or an oven. If you add a third battery, you can now run multiple large loads at the same time. A third battery in this scenario triples your capacity as well as the power output and substantially increases the amount of time a home can run on battery power.

    Pairing your battery system with solar means that as long as the sun is shining, you’ll be charging the backup power of your batteries. What a beautiful marriage!

    Read More: Backing It Up: Which Energy-Storage Solution Should You Choose?

    Environmental Impacts

    Regardless of your energy needs, your solar system will have a significant impact on the environment. Consider this, it takes one pound of coal to produce 1 kWh. In 2020 Oregon, about 26 percent of our electricity was produced using coal. The average home in Oregon consumes about 260 lbs of coal a month! Shifting to solar can eliminate all that coal usage and overall decrease your carbon footprint.


    There is a lot to think about when deciding to install a solar system. Every home is different, every family has different needs, and understanding the basics will only help you make a more informed decision when taking the next step to go solar!

    Read More: Oregon Solar Incentives | WA Solar Incentives


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